More On Tesla's $25,000 Compact Car: Made In China, Sold Globally

Tesla is not only lowering the prices of its current models, but also bringing a much more affordable car to market.

By: EVANNEX

Feb 25, 2021 at 9:29am ET

Add InsideEVs as a preferred source in Google

Comment

This article comes to us courtesy of EVANNEX, which makes and sells aftermarket Tesla accessories. The opinions expressed therein are not necessarily our own at InsideEVs, nor have we been paid by EVANNEX to publish these articles. We find the company's perspective as an aftermarket supplier of Tesla accessories interesting and are happy to share its content free of charge. Enjoy!

Posted on EVANNEX on February 25, 2021 by Charles Morris

Here’s another way in which Tesla is different from other automakers: it regularly reduces the prices of its vehicles. Some interpreted the company’s recent decision to drop the prices of the base Model 3 and Model Y as a warning sign of flagging demand. That doesn’t seem likely, considering that it was only the entry-level models that got a price cut—Tesla kept the prices of the mid-level trims the same, and actually increased the prices of the top-level trims.

Above: An artists' design rendering of a future, lower-priced Tesla hatchback EV (Source: Budget Direct Car Insurance)

After the latest round of adjustments, the cheapest Tesla you can buy is a Standard Range Plus Model 3, for $36,990. That’s significantly lower than the average price for a new car in the US. Auto prices have soared over the last few months, and according to auto industry authority Edmunds (via USA Today), the average price of a new vehicle was $40,573 as of December 2020—an all-time record.

For lower-income buyers, however, the news that they can buy an EV for less than the average new-car price is small consolation—37 big ones is far more than many working folks can afford, and Tesla’s dream of bringing EVs to the masses remains a dream.

However, Tesla appears to have a cheaper vehicle in the pipeline. At the 2020 Battery Day, Elon Musk teased “a $25,000 car that will be basically on par [with], maybe slightly better than, a comparable gasoline car,” to be available in about three years.

Above: A recent interview with Tesla's China President; Press the "cc" button on bottom right for English subtitles (YouTube: T-Study)

In a recent interview, Tesla China President Tom Zhu said that Tesla’s entry-level compact car will be designed at the Tesla R&D center that’s currently under construction in Shanghai. The new $25,000 EV will be built in China and, while it will primarily be aimed at the small-car-friendly Chinese market, it will also be sold globally. Tesla’s compact EV is expected to be a hatchback, and to share the same platform as Model 3.